Research Update: Bolivia-Based Banco Union S.A. Rated 'BB-/B', Outlook Stable

We're assigning our 'BB-' long- and 'B' short-term issuer credit ratings to Banco Union. Our ratings on Banco Union reflect its good business and revenue diversification, low credit losses, prospective adequate profitability, and strong funding and liquidity characteristics compared with those of domestic peers. On the other hand, limited capital adequacy levels, inherent likelihood of political interference in the bank's operations, and our Banking Industry Country Risk Assessment (BICRA) on Bolivia restrain our ratings. We've assigned a 'bb-' stand-alone credit profile (SACP) to Banco Union. Additionally, we believe there's a very high likelihood that the government would provide extraordinary support to bank in case of financial distress. However, the issuer credit ratings don't incorporate support from the government because the

...+ We're assigning our '##-' long- and 'B' short-term issuer credit ratings to Banco Union. + Our ratings on Banco Union reflect its good business and revenue diversification, low credit losses, prospective adequate profitability, and strong funding and liquidity characteristics compared with those of domestic peers. On the other hand, limited capital adequacy levels, inherent likelihood of political interference in the bank's operations, and our Banking Industry Country Risk Assessment (BICRA) on Bolivia restrain our ratings. + We've assigned a '##-' stand-alone credit profile (SACP) to Banco Union. Additionally, we believe there's a very high likelihood that the government would provide extraordinary support to bank in case of financial distress. However, the issuer credit ratings don't incorporate support from the government because the SACP of the entity is at the same level as the sovereign rating. + Stable outlook on the bank reflects our expectation that it will maintain the current...

Research Update